Poor quality pulls down palay prices - traders

Millers and traders are blaming the poor quality of unhusked rice being produced by farmers to the current low prices of the staple food.


This was validated by Agriculture Secretary William Dar, who said consumers now prefer quality rice.

In a statement, the Department of Agriculture (DA) said rice millers and traders are having difficulty buying palay because of low quality, composed mostly of assorted or ‘rumble’ varieties that when milled produce chalky and broken grains.

“If farmers want to command good prices, they should plant better quality rice seeds and what the consumers want,” a miller from Nueva Ecija told DA.

A Bulacan rice miller, on the other hand, also told the DA that the COVID-19 pandemic has made it hard for them to sell their rice stocks because of lack of demand, which “was made even harder by the low quality of palay harvest this season”.

DA likewise cited a trader from Isabela, who said that consumers now prefer rice varieties that are long-grain and taste and smell better when cooked.

“Millers and traders are thus one in saying that farmers should now plant varieties that have good milling and eating qualities, and preferred by consumers,” DA said.

Data from the Philippine Statistics Authority (PSA) showed that palay prices fell to as low as P12 per kilogram (/kg) in some areas in the country during the third week of September, which means some farmers barely made money during this harvest season.

This, since in order to produce a kilo of rice in the Philippines, Filipino rice farmers have to spend P12.72, which is higher compared to the production cost of farmers in Vietnam and Thailand at P6.22/kg and P8.86/kg, respectively.

With such production cost, the breakeven farmgate price of fresh harvest should be around P14.50/kg.  

In Davao City, palay's price went down to as low as P12.74/kg during the third quarter of September, while Caraga, North Cotabato, and Surigao del Sur saw palay prices plunging to around P12/kg to P12.80/kg.

To address the problem about the poor quality rice being produced by farmers, Dar said that for the succeeding cropping seasons, the country will not just be after attaining production targets, but also producing quality rice for Filipino consumers that will provide higher income for farmers.

“We need to adapt to the changes brought about by the Rice Tariffication Law , one of which is consumers' preference for quality rice. This is now an integral part of the overall transformation of the country’s rice industry,” Dar said.

Dar said he will meet with seed producers to discuss the preferred rice varieties of consumers, and the desired levels of productivity that will provide farmers more income.

“We have to make seed producers, farmers and other stakeholders understand that our overall strategy now is inclusive market-oriented development,” Dar said.

“Kung ano demand ng market, kung ano ang pangangailangan ng consuming public iyon ang dapat i-produce ng ating mga magsasaka [What the market demands, what the consuming public needs, farmers should be able to produce that,” he added.

Under the RTL, which allowed the unlimited entry of cheaper imported rice, the government is compelled to provide free seeds and mechanization to rice farmers through the Rice Competitiveness Enhancement Fund (RCEF), the collection of rice import tariff.  

This means that after RTL was passed in March last year, it was actually the DA who provided some farmers the seeds that they used for the current harvest, which according to traders yielded poor quality rice.  

So far, the DA already distributed 1.38 million bags of certified inbred seeds to 554,512 farmers during the dry season 2019 to 2020, and 2.27 million bags of inbred seeds to 862,854 farmers during the current wet season.

Moving forward, Dar said the DA will hold consultations with farmers, seed producers, traders, millers, and other stakeholders to determine current industry trends, demand of the domestic retail market and institutional buyers, customers’ needs and wants, and needed policy shifts or reforms and government interventions.

The other day, agriculture lobby group Samahang Industriya ng Agrikultura (SINAG) asked President Rodrigo Duterte to order DA to allot P36 billion to help subsidize palay procurement.

This, according to SINAG Chair Rosendo So will be used to help private millers and traders to buy palay at P19/kg, supposed that it's being bought at P15/kg.

He said this would be enough to buy 9 million metric tons (MT) of palay from farmers without shortchanging both farmers and millers.  

Right now, the National Food Authority (NFA), whose sole mandate is to secure the government's buffer stock for calamities and national emergencies, procures palay at P19/kg.

However, NFA Administrator Judy Dansal said before that while the state-run grains agency can intensify its palay procurement, it couldn't buy the entire produce due to its limited budget and post-harvest facilities.

Palay harvest during the first semester of 2020 totaled 8.387 million metric tons (MT), 1.4 percent more than the 8.269 million MT produced during the same period last year.

Second semester palay output this year is expected to be at 11.954 million MT, 13.4 percent more than last year's 10.545 million MT.